Top-down decentralization and the folly of power

Abstract

Ackoff’s typology of machine, organism, and social-system concepts may give the impression that this sequence also represents the natural evolution of organizational models over time. Nothing could be further from the truth. Some of the first modern, and at the same time highly successful business enterprises, the railroads, which originated in the midst of the nineteenth century, were initially organismically decentralized organizations, paradoxically created by entrepreneurial engineers educated in the mechanistic tradition. This was the result of their having been so remarkably sensitive to the new complexities of organizational life. However, by the end of the nineteenth century, in one of those quaint twists of history, the less effective command-and-control machine bureaucracy, dominated by bankers, had all but forcibly replaced the impressive decentralized organizational innovations created by these pioneers of modern management.